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Private Equity Holding announces more write-downs, Swiss Life withdraws its credit facility

Listed Swiss private equity fund Private Equity Holding has announced that it has made permanent write-downs of CHF96m over the nine months between 1 April 2002 to 31 December 2002, CHF38m of which was recorded in the last quarter.

Its fair value per share has declined to CHF154.60 from CHF213.52. The firm blamed currency effects, difficulties with portfolio companies and ‘corrections of the valuations in response to the prevailing weak market conditions'.

The fund, managed by Swiss Life Private Equity Partners and once one of the largest in Europe, has been hit hard by the bursting of the internet bubble in 2000.

Private Equity Holding's most pressing problem is paying back to Swiss Life its loan of CH325m. In a statement, the firm said, ‘Securing financial resources continues to present the major challenge…Private Equity Holding has committed itself to present to Swiss Life as soon as possible an acceptable proposal on the early repayment of the outstanding balance of the loan.'

There was little sign of positive news in the future: the firm did not rule out possible further declines in valuations, and said that ‘a recovery in the public markets and a pick-up in M&A and trade sale activity are a prerequisite for any benefits to materialise'.

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